Kroger, like many companies, has been passing along higher prices to consumers to offset its rising costs and higher supplier prices for meat, produce and other items. Kroger has been building customer loyalty by easing rising gas prices with rewards points on their purchases that are good for up to a $1 a gallon off gas, as well as offering loyalty-card holders discounts for the items they buy most often.

Kroger said customers are shopping more often, but buying fewer items per trip and also buying more store brands that are usually priced lower than national brands. With national unemployment of 9.1 percent and a volatile stock market, higher prices make shoppers wary. Kroger said product costs rose 5.2 percent in the quarter — seen most in seafood, meat and produce.

"The sluggish economy continues to strain household budgets while increasing consumer anxiety," Dave Dillon, chairman and CEO, told investors on a conference call. "In fact, customers tell us their expectations for the economy are more pessimistic now than at any time this year."

Kroger reported its net income rose 7.3 percent to $280.8 million, or 46 cents per share. That's up from $261.6 million, or 41 cents a share, a year ago. Revenue rose 11.5 percent to $20.9 billion, helped by gas sales. Kroger, which operates 2,439 grocery stores in 31 states, sells gas in more than 1,000 of its own stations.

Excluding tax adjustments, though, profit would have been 41 cents during the second quarter and 38 cents in the year-ago period. Analysts' estimates, which typically exclude special items, were for per-share earnings of 43 cents a share on revenue of $20.5 billion.

Kroger shares fell nearly 6 percent, down $1.33 to close at $22.02 as the broader markets sold off. The stock has traded in a 52-week range of $20.53 to $25.85.

Some analysts expressed concern because Kroger's profit margins were lower and the rough economy could mean a return to price-cutting competition that undercut industry results during the Great Recession.

"We believe the competitive environment is becoming more difficult as food retailers compete for share of wallet with cash-strapped consumers," Deborah Weinswig, a Citi Investment Research analyst, said in a note to clients.

Kroger's leaders say they want to invest for the future by building up their regular household base with discounts and other rewards during tough times.

Janney analyst Jonathan Feeney said while the promotions are concerning, Kroger's results indicate it is reaping long-term benefits.

"This is just reality — it's not that Kroger doesn't like earnings," he said in a note.

Kroger posted a 5.3 percent rise in revenue at stores open at least 15 months, a key retail indicator of its health since it doesn't account for stores that open or close during that time and excludes fuel revenue. Kroger raised its full-year forecast for revenue at stores open at least 15 months to between 4 to 5 percent from 3.5 to 4.5 percent.

But the Cincinnati company, which owns chains that include Ralphs, Food 4 Less and Smith's, is sticking with earnings projections for the year in a range below Wall Street estimates. Based on current conditions, Kroger forecasts earnings for the year will be near the top range of between $1.85 and $1.95 a share. That compares with $1.96 per share on revenue of $89.47 billion analysts surveyed by FactSet are expecting.